3 Generous Dividends From Companies You Can Count On

A generous dividend is all well and good, as long as the company sticks around long enough to keep paying it out, but in this economy that's not necessarily a given. In that spirit of realism, let's look at three stocks with strong yields from companies that look like they're going to be around awhile.

Each of these three companies is consumer-facing, so the business models are easy to understand. Each is a king of its market space that can make, market, and distribute its products with machine-like efficiency. And each is a profit-making dynamo, producing goods that people around the world need to buy over and over.

Without further ado, then...

1. California Water Service (NYSE: CWT) Water. What would we do without it? Die. Good thing, then, that we have these companies called utilities that provide it for us, day in and day out, boringly but consistently raking in cash and returning most of it right back to us as dividends.

California Water Service has been around since 1926, and provides water, sewage, and related services for almost half a million customers in California and a few thousand more in Hawaii. By the numbers:

We like to see dividend yields of around 3% (an arbitrary threshold, but one we feel separates the wheat from the chaff). At 3.7%, California Water Service easily makes the grade.

We also like to see dividend payout ratios of 50% or less (the lower the percentage, the more sustainable). At 63%, California Water Service seems higher than we normally like, but utilities can comfortably go as high as 75%.

Gross margin is an indicator of brand strength and pricing power, and California Water Service's is a very healthy 63.02% over the past 12 months.

Finally, year-over-year quarterly revenue was a big 15.7%. Quarterly earnings growth was a modest but acceptable 2.7% year over year.

The stock trades for an affordable $18 with a P/E of 19. California Water Service is in good financial shape, pays a generous, sustainable dividend, and provides a service we humans literally can't live without.

2. El Paso Pipeline Partners (NYSE: EPB) Natural gas. Without it, would we die? No. There are other ways we can heat our homes and businesses, but gas is a relatively cheap, clean way to do it, and a lot of people across the country rely on it day in and day out.

El Paso Pipeline Partners is a master limited partnership, and makes its money through a series of partnerships across the country that own and operate natural gas pipelines and storage facilities: 12,900 miles and 97 billion cubic feet in total, respectively. By the numbers:

We said we like to see yields of around 3%. El Paso's 5.3% nearly doubles that.

El Paso's payout ratio is 87%, beyond the 75% we discussed above. But master limited partnerships are required to pay more of their profits in dividends, which enhances their yield for investors.

El Paso's gross margin is a big 68.15% over the trailing 12 months, crushing the industry average of 28.28%.

El Paso's quarterly revenue grew at a modest but acceptable 2.4% year over year, with quarterly earnings jumping an astonishing 57.5%

The stock trades for an affordable $27 with a P/E of 18. Natural gas is a big and growing part of the U.S. energy picture, and well-run providers like El Paso aren't going away anytime soon.

3. Coca-Cola (NYSE: KO) Have a Coke and a smile, Fools, because while humanity certainly wouldn't go extinct without Coca-Cola, it would certainly be less happily caffeinated. Coca-Cola began life as a public company in 1886 and has been the real thing ever since. While it's had its shares of ups and downs over the years (what 125-year-old company wouldn't?), it's still going strong. By the numbers:

Coke's quarterly revenue grew a healthy 5.2% year over year, while quarterly earnings year over year were down 71.3%. Why the drop? In the fourth quarter of 2010, Coca-Cola rolled in earnings of the bottlers it had acquired, thus temporarily boosting earnings for that quarter. Adjusting for that, at $0.79 earnings per share for fourth-quarter 2011, the company beat expectations.

The stock itself trades for an affordable $68 with a P/E of 18. And for the slightly lower dividend, you're partnering up with the one of the world's greatest, longest-lasting companies.

11 More Rock-Solid Dividend StocksThere you are: three great companies with stocks that offer some of the market's best, most sustainable dividends. For the scoop on 11 more great dividend stocks from rock-solid companies, read this brand-new Motley Fool special free report: "Secure Your Future With 11 Rock-Solid Dividend Stocks." To get your copy while the stocks are still hot, simply click here now.

Fool contributor John Grgurich would love to teach the world to sing, but owns no shares of any of the companies mentioned in this column. The Motley Fool owns shares of Coca-Cola, PepsiCo, and California Water Service Group. Motley Fool newsletter services have recommended buying shares of PepsiCo, Coca-Cola, California Water Service Group, and El Paso Pipeline Partners, as well as creating a diagonal call position in PepsiCo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a scintillating disclosure policy.

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